Provident Financial - Woodford, Barnett & Darwall

jimjames

Glen_Clark wrote: »

Perhaps the self employed agents were therefore failing to collect debts, for which they were wrongfully blamed by the company, and replaced with employees who face the same problem?

From my understanding of the situation that wasn't the case. Agent collection rates were vastly better than the new system.

Malthusian

But Glen makes a fair point - maybe the debt collection rate would have fallen from 90% to 57% even without the change from self-employed agents to salaried collectors, because the real culprit is rising rents and/or negative real wage growth leading to an increase in defaults. If you can't pay your debts without becoming homeless then knowing your debt collector by name isn't going to make any difference - you're not going to let yourself get thrown out on the streets so as not to upset your debt collector.

Not saying it's correct - the plummet in collection rates and profits seems too sudden to be blamed on the economy, plus there is the evidence from the self-employed agents on online forums - but it has to be considered.

The real eye-opener for me is that the doorstep collection model is still profitable in the world of payday lending. The man from the Pru who went door-to-door collecting premiums for life insurance and pension policies died out years ago because regulation and costs made it unviable, but apparently it's still profitable for payday lending. People no longer doorstep the working classes to persuade them to take out life insurance and pensions, but they do to persuade them to get themselves into debt. Rather depressing.

aroominyork

During the noughties I worked at Business in the Community. Their corporate volunteering programme had boards chaired in Bradford by Provident Financial and in Leeds by Cattles, PF’s brethren in ‘non-standard consumer credit’. Staff held their noses and got on with the job. I just googled Cattles for old times' sake and see they went into liquidation last year.

Glen_Clark

Malthusian wrote: »

apparently it's still profitable for payday lending. .

or maybe it isn't because Provident are losing money on it?

Malthusian

It was profitable when the doorsteppers were self-employed agents.

I'm still going with the consensus rather than the theory that the economy's to blame. To say that the real problem is that people have too much debt ignores the fact that people have had too much debt for at least two decades. The frogs haven't suddenly decided to jump out of the boiling pan en masse.

The online forums used by the collection agents do not back up the theory that Provident Financial changed its system because they were failing to collect debts. The switch seems to have either been change for the sake of change, or my own pet theory that they feared a knock on the door from HMRC, given the widely publicised hostile climate against bogus self-employed arrangements where people only contract for one company and are therefore in reality employees.

StellaN

I hold Jupiter European Opportunities IT and the fund manager Alexander Darwall has invested 5.69% in Provident (a top 10 holding) so the trust is down about 3% this week.

AnotherJoe

This does put the lie to all those who say that you can't beat the market because how can you know better about a company than an all those super sophisticated investment companies who can do ultra detailed research, talk to the execs etc. Like Woodford no doubt did.

IMO if you understand a market (especially a new one, or new tech in an established field) its possible to get ahead of the game. And that might be positive, as in investing in a company, or negative, as in not investing, or in selling at the right time, eg before most people react to whats happening Including the execs of those companies.

economic

AnotherJoe wrote: »

This does put the lie to all those who say that you can't beat the market because how can you know better about a company than an all those super sophisticated investment companies who can do ultra detailed research, talk to the execs etc. Like Woodford no doubt did.

IMO if you understand a market (especially a new one, or new tech in an established field) its possible to get ahead of the game. And that might be positive, as in investing in a company, or negative, as in not investing, or in selling at the right time, eg before most people react to whats happening Including the execs of those companies.

agreed, although personally woodford is way overrated anyway - hes just a brand name which is why people go for him. far better fund managers out there.

JohnRo

The market like everyone else can only react to news made available in the public domain. How quickly you get that news and how quickly you can react to it is where the players get their advantage.

I suspect anything else risks insider trading charges.

Linton

AnotherJoe wrote: »

This does put the lie to all those who say that you can't beat the market because how can you know better about a company than an all those super sophisticated investment companies who can do ultra detailed research, talk to the execs etc. Like Woodford no doubt did.

IMO if you understand a market (especially a new one, or new tech in an established field) its possible to get ahead of the game. And that might be positive, as in investing in a company, or negative, as in not investing, or in selling at the right time, eg before most people react to whats happening Including the execs of those companies.

No it doesnt. No-one, not even Woodford, is going to be right every time. You merely have to be right sufficiently often to make a difference.

The Woodford Equity income fund has only been going 3 years so it's a bit early to say anything very much. The first year year it did very well compared with the FTSE All Share, the next slightly worse, and the past year very much worse mainly it seems due to the recent PF fall. Overall since it started it's exactly the same.

I dont hold and have no intention of holding any Woodford funds and am not a great fan.